district seve

7/31/2019 District Seve

1/30

FLORIDA DEPARTMENT OF TRANSPORTATION

CONTRACTS ADMINISTRATION OFFICE

MARKET ANALYSIS SECTION

DISTRICT SEVEN

BID MONITORING AND MARKET ANALYSIS STUDY

Market Analysis Section

Kwan-Li Ling

Reviewed by:

Nasser Pourfarzaneh

June 15, 2010

CONFIDENTIALPer 337.168 F.S.

1


2/30

TABLE OF CONTENTS

INTRODUCTION 1

SELECTION CRITERIA . 1

SELECT MODEL . 2Proposal/Bid Analysis 3

MARKET SHARE 4Market Share Analysis .. 7-8

VENDOR COMPETITION 9-10

VENDOR ACTIVITY MAPS 11

Ajax Paving .. 11Apac-Southeast 12D.A.B. Constructors 13Cone & Graham 14Findings 15-16

SUBCONTRACT ANALYSIS .. 17-18

PRICE ANALYSIS .. 19-21

ADDENDUM .... 22-25

SUMMARY 26-27

2


3/30

INTRODUCTION

This study monitors proposal and bidding patterns and performs market share analysis,vendor competition analysis, pricing analysis in District Seven. The data was collected withspecifications listed in Selection Criteria indicated below. The goal is to search for signs of bid

collusion, such as:

Rotation bid; vendors take turns to be low bidder

Prices mysteriously drop when a new bidder enters the market

Primary winner subcontracts to one or more primary losers

Sham bid; vendor agrees not to bid and receives a subcontract or payoff for return

Identical line item but prices vary a lot on different contracts that are close in time orlocation

Complementary bid; vendor intentionally bids high to lose

Bids are very close; vendors might know each others price

Some part of contract bidding low and inexplicably high in another part

SELECTION CRITERIA

Area of Study: District Seven, a total of five counties (Citrus, Hernando,Hillsborough, Pasco, Pinellas)

Contract Letting Date: January 01, 2003 to December 31, 2008

Contract Types: All Construction and Traffic Operation contractslet by Central Office and District Seven.

Contract Letting Status: Allawarded contracts selected.

Contract Awarded Amount: > $250,000.

BAMS/DSS Models: Select Model, Market Share Model, Vendor CompetitionModel, Line Item Profile Model.

Other: Identifying asphalt facility locations by using LIMSDatabase report and telephone call to verify and update

the most recent change of facility location together within-house vendor maps, Microsoft Excel, DOT ApplicationSoftware CPP, CPQ and GIS View.

3


4/30

SELECT MODEL

Reports from the Select Model showed a total of 1313 proposals ordered, 731 bidssubmitted by vendors in District Seven. It yielded a total of 186 awarded contracts with a total of$1,672,239,353 based on the sub-setting criteria for all five counties in District Seven.

Table 1 lists the total awarded contracts, total contract dollar amounts and percentages foreach individual county in District Seven.

County

ContractNumber

ContractNumber (%)

AwardedAmount($)

AwardedAmount(%)

CITRUS 9 4.8% $74,186,902 4.4%

HERNANDO 12 6.5% $44,883,102 2.7%HILLSBOROUGH 83 44.6%

$1,050,176,253 62.8%

PASCO 27 14.5% $116,924,059 7.0%

PINELLAS 55 29.6% $386,069,037 23.1%

Total 186 100.0%$1,672,239,3

53 100.0%

Table 1

Hillsborough County received 44.6% (83 contracts) of the entire District Sevens total

contracts and 62.8% ($1,050,176,253) of the entire District Sevens total contract awarded dollars.Hillsborough County received the most contracts and awarded contract dollars compared to theother four counties in District Seven.

Pinellas County received 29.6% (55 contracts) of the entire District Sevens total contractsand 23.1% ($386,069,037) of the entire District Sevens total awarded contract dollars. PinellasCounty ranked second highest in received contracts and contract dollars compared to the othercounties in District Seven.

Both Hillsborough and Pinellas Counties got the majority of contracts and contract dollarsin District Seven. Together they had 74.2% of contracts and 85.9% of awarded contract dollars in

District Seven.

4


5/30

Proposal/Bid Analysis

Two baselines were calculated from the statewide level and the District Seven level bycomputing the ratio of total proposals to total contracts and the ratio of total bids to total contracts.These baselines were used to judge the vendor participation activity level on ordering proposalsand submitting bids. District Sevens average participation levels (7.1, 3.9) were slightly higherthan the statewide average levels (6.6, 3.7), both in ratio of proposals to contracts and ratio of bidsto contracts. The vendor participation level is computed for each county in District Seven. Table 2shows detailed information of proposal, bid, contract number and ratio numbers associated to eachcounty in District Seven.

Location ContractNumber

ProposalsOrdered

BidsReceived

Ratio ofProposals/

Contracts

Ratio ofBids/

ContractsSTATEWIDE 1899 12497 7066 6.58 3.72

DISTRICT 7 186 1313 731 7.06 3.93

CITRUS 9 49 29 5.44 3.22

HERNANDO 12 105 67 8.75 5.58HILLSBOROUGH 83 573 302 6.90 3.64

PASCO 27 193 119 7.15 4.41

PINELLAS 55 393 214 7.15 3.89

Table 2

Citrus County had the lowest vendor participation rate both in purchasing proposals andsubmitting bids, below statewide average. The other four counties show very good vendorparticipation in purchasing proposals and submitting bids. Graph 1 demonstrates statewideaverage vendor participation in proposals and bids in blue and green and each county in red andpurple.

5


6/30

Graph 1MARKET SHARE

District Seven received a total of 186 contracts (not including small contracts less than$250,000) from year 2003 to 2008. Ajax Paving, Apac-Southeast, D.A.B. Constructors and Cone& Graham are the chosen major vendors receiving the highest contract numbers. Table 3demonstrates the number of contracts these four top vendors worked on and percentage associatedwith each county. Together these four top vendors worked on 40% of District Sevens contractsand the other vendors worked on 60%.

Counties Ajax Paving# contracts and% in County

Apac-Southeast# contracts and %in County

D.A.B. Const# contracts and% in County

Cone&Graham# contracts and% in County

Others# contracts and% in County

Total# contracts and% in County

CITRUS4

44.44%

111.

11%4

44.44%9

4.84%

HERNANDO

1

8.33%

650.00%

541.67%

126.45%

HILLSBORO

1619.28%

1214.46%

22.41%

5363.86%

8344.62%

PASCO2

7.41%1

3.70%9

33.33%1

3.70%14

51.85%27

14.52%

PINELLAS9

16.36%6

10.91%5

9.09%35

63.64%55

29.57%

Total27

14.52%20

10.75%19

10.22%9

4.84%111

59.68%186

100.00%

Table 3

6


7/30

Ajax Paving won a total of $128,901,509 contract dollars in District Seven; it was secondhighest among selected major contractors in term of dollar amount, next to Cone & Graham. ButAjax Paving received the highest contract numbers among the top major contractors, a total of 27contracts. Among total contracts they won in District Seven, 59% (16/27) were in Hillsborough

County.

Apac-Southeast received $106,424,256 (6.4%) contract dollars with a total of 20 contractsin District Seven. They did not work in Citrus County, and major contract dollars they receivedwere in Hillsborough County, 85%.

D. A. B. Constructors won 19 contracts with a total of $74,862,625 awarded contractdollars in District Seven. They worked in Pasco, Hernando, and Citrus counties.

Cone & Graham only had 9 contracts in District Seven with the highest dollar amount, atotal of $132,738,892. Their contracts were spread out among Pinellas, Citrus, Hillsborough, and

Pasco Counties.

Table 4 demonstrates detailed information of the above four major vendors total awardedcontract dollars in each county associated with percentage of contract dollars awarded among theseselected major contractors and other contractors associated with each county.

Counties Ajax Paving$ Amt and % inCounty

Apac-Southeast$ Amt and % inCounty

D.A.B. Const$ Amt and %in County

Cone&Graham$ Amt and % inCounty

Others$ Amt and % inCounty

Total$ Amt and % inCounty

CITRUS

$14,208,611

19.15%

$37,100,000

50

.0%

$22,878,291

30.84%

$74,186,902

4.44%

HERNANDO

$647,9671.44%

$28,633,236

63.80%$15,601,899

34.76%$44,883,102

2.68%

HILLSBORO

$96,436,2769.18%

$90,695,3698.64%

$27,412,922 2.61%

$835,631,686 79.57%

$1,050,176,253 62.80%

PASCO$4,543,288

3.89%$4,574,318

3.91%

$32,020,778

27.39%$20,753,119 17.75%

$55,032,55647.07%

$116,924,0596.99%

PINELLAS$27,921,945

7.23%$10,506,602

2.72%$47,472,851 12.30%

$300,167,639 77.75%

$386,069,03723.09%

Total$128,901,50

9 7.71%$106,424,25

6 6.36%$74,862,625 4.48%

$132,738,892 7.94%

$1,229,312,071 73.51%

$1,672,239,353 100.00%

Table 4

These four major contractors received a total of 26.5% of market contract dollars, and othercontractors had 73.5%. Graph 2 shows the market condition, demonstrating strong competitionbetween non-major and major vendors.

7


8/30

Market Shares Total Dollars in District SevenContract Awarded Amount > $250,000

Year 2003 2008

Graph 2None of these four major vendors dominated District Sevens market; Graph 3

demonstrates the dynamic market shares with percentage contract awarded dollar amount by year.It shows market was very competitive. There was no sign of business track impacting by newvendor entered market.

Graph 3

A pattern worth noting is that Cone & Graham only won contracts in odd years; althoughthey bid in even years, they did not win any contract in even years. The total contract awarded

8


9/30

amount they received in this study period was very close to what Ajax Paving got; onlyapproximately $4 million (0.2%) difference.

Ajax Paving and Apac-Southeast were also very similar situation. The difference in totalcontract dollars between these two top vendors is $22.5 million (1.35%).

Market Share Analysis by County

Citrus County

Cone & Graham received one large design-build contract with $37,100,000 contractdollars. They occupied 50% of Citrus County market dollars. D. A. B. Constructors had fourcontracts with $14,208,611 (19%) contract dollars. Together these two major contractors occupied69% of the market in Citrus County and the other contractors shared the remaining 31%.

Hernando County

Hernando County had the smallest share in the market of District Seven, 2.68%, a total of$44,883,102. D. A. B. Constructors was the major player in Hernando County. They received64% of entire Hernando Countys market, a total of $28,633,236 contract dollars. Apac-Southeast

only had 1.4% ($647,967) of the dollar market. Together these two major contractors had 65% ofthe market in Hernando County. The other contractors received $15,601,899 (35%) contractdollars.

Hillsborough County

9


10/30

Hillsborough was the county receiving highest contract dollars in District Seven, 63%, atotal of $1,050,176,253 contract dollars. Ajax paving, Apac-Southeast and Cone & Graham werethe top vendors who received $96,436,276, $90,695,369, $27,412,922 contract dollarsrespectively. These three top vendors together occupied a total of 20% and the other vendors had80% of market in Hillsborough County. This presents a healthy market sharing condition.

Pasco County

Pasco County received the third highest contract dollars in District Seven, 7%, a total of$116,924,059 contract dollars. Four major contractors were all working in this county. D. A. BConstructors, Cone & Graham, Apac-Southeast and Ajax Paving received $32,020,778,$20,753,119, $4,574,318, $4,543,288 contract dollars respectively. Together they had 47% of themarket in Pasco County and the remaining contractors shared the other 53%.

Pinellas County

Pinellas County had the second highest share of contract dollars in District Seven, 23%, atotal of $386,069,037 contract dollars. Cone & Graham, Ajax Paving and Apac-Southeastreceived $47,472,851, $27,921,945, $10,506,602 contract dollars respectively. These three majorcontractors had a total of 26% of market in Pinellas County; the other contractors shared a total of74%.

Hillsborough and Pinellas were the number one and second, receiving the most awardedcontract dollars, 62.8% and 23.1% respectively. Graph 4 below summarizes the overall vendorcompetition in each county; it shows none of major vendors having a big piece of the pie inHillsborough and Pinellas Counties, which stand for 86% of contract awarded dollars in District

Seven.

Graph 4

10


11/30

VENDOR COMPETITION

In this section we analyze how top vendors compete with each other. The top vendors inDistrict Seven were chosen by highest contract numbers that they received. Diagonally in thematrix below, Ajax Paving submitted 88 bids and got 27 contracts; Apac-Southeast submitted 81bids and won 20 contracts; D.A.B. Constructors submitted 33 bids and won 19 contracts; Cone &Graham submitted 49 bids and won 9 contracts; the rest of vendors submitted 480 bids andreceived 111 contracts.

VENDOR COMPETITION MATRIX

SUPPLEMENTED WITH TOP VENDORS RANKED BY CONTRACT NUMBERS

SELECTEDVENDORS AJAX APAC D.A.B.

CONE &GRAHAM OTHERS

AJAX 88 0.12 68 0.77 17 0.19 16 0.18 71 0.81

27 0.31 22 0.32 3 0.18 1 0.06 18 0.25

APAC 68 0.84 81 0.11 15 0.19 12 0.15 64 0.79

16 0.24 20 0.25 2 0.13 0 0.00 13 0.20

11


12/30

D.A.B. 17 0.52 15 0.45 33 0.05 11 0.33 28 0.85

9 0.53 9 0.60 19 0.58 6 0.55 16 0.57

CONE & 16 0.33 12 0.25 11 0.20 49 0.06 45 0.92GRAHAM 1 0.06 1 0.08 1 0.10 9 0.18 8 0.18

OTHERS 71 0.15 64 0.13 28 0.06 45 0.09 480 0.66

35 0.49 29 0.45 9 0.32 33 0.73 111 0.23

The vendor competition matrix also shows the percentage of win contracts over bidnumbers. Ajax Paving won 31%, Apac-Southeast won 25%, D.A.B Constructors won 58% andCone & Graham won 18%. Ajax Paving won the most contracts among the top vendors; butD.A.B. Constructors was the best performer among all vendors in term of winning a contract, 58%(19/33).

The total bids in this study period are 731. Ajax Paving occupied 12% (88/731) of the

market in terms of bid number submitted. Apac-Southeast took 11% of total bid submitting inDistrict Seven, very close to Ajax Paving. D.A.B. and Cone & Graham had 5% and 6%respectively; both percentages are very close to each other.

Off-diagonal elements in the vendor competition matrix are the frequency with which eachvendor competes with its rivals. Ajax Paving and Apac-Southeast submitted a total of 68 bidstogether in the same contracts; Ajax Paving won 22 contracts (32%) and Apac-Southeast won 16contracts (24%), a difference of 8%.

Ajax Paving and Cone & Graham were competing in 16 contracts; they both won onecontract (6%) each, a difference of 0%.

Apac-Southeast and Cone & Graham were competing in 12 contracts. Apac-Southeast didnot win any contract (0%); Cone & Graham won one contract (8%), a difference of 8%.

D.A.B. and Cone & Graham were bidding together in 11 contracts. D.A.B. won sixcontracts (55%); Cone & Graham won one contract (10%), a difference of 45%.

Finding

Apac-Southeast was 84% (68/81) bidding against Ajax Paving. Ajax Paving was 77%(68/88) bidding against Apac-Southeast. Apac-Southeast and Ajax Paving had a high frequency ofbidding against each other. If they team up together, their chances of winning a contract were56%.

12


13/30

VENDOR ACTIVITY MAPS

In this section we use in-house vendor activity maps to show the major contractors asphaltfacility locations; total number of bids won and lost in each county of District Seven; as well asgeographic location of contracts.

Ajax Paving

Ajax paving is ranked the number one top contractor, receiving the highest contractnumbers in District Seven. They have one asphalt facility in Hillsborough County and one inPasco County of District Seven. Ajax Paving did not submit any bids in Citrus County. They didnot win any contracts in Hernando County. They submitted the most bids, won the most contractsand lost the most contracts in Hillsborough County. They have facilities in Pasco County, but theydid not do well there; they only won two contracts and lost twelve.

District SevenAjax Paving

13


14/30

Map 1

Apac-Southeast

Apac-Southeast is ranked the second major contractor for the number of contracts theywon in District Seven. They have a total of three facilities in District Seven, one in Hillsborough,

one in Pasco and one in Pinellas County. They did not submit any bids in Citrus County. Theysubmitted the most bids, won the most contracts and lost the most contracts in HillsboroughCounty. They have facilities in Pasco County, but did not do well there; they only won twocontracts and lost twelve.

District SevenApac-Southeast

14


15/30

Map 2

D. A. B. Constructors

D. A. B. Constructors is ranked third among major contractors in terms of total won

contracts in District Seven. They have one facility in Hernando County of District Seven. Theywon contracts in Citrus, Hernando, and Pasco County and did not win contracts in HillsboroughCounty. They did not submit any bid in Pinellas County. They do not have facilities in PascoCounty, but they do well there. They won nine contracts and lost seven.

District Seven


Map 3

15


16/30

Cone & Graham

Cone & Graham is chosen as the 4th major contractor for the number of contracts theywon and contract dollars they received in District Seven. Cone & Graham do not have any

facilities in District Seven. They did not win any contract in Hernando County. They submittedthe most bids and won the most contracts in Pinellas County.

District SevenCone & Graham

Map 4

16


17/30

Findings

We examine Cone & Graham, since they did not have any facility in District Seven butreceived the highest awarded contract dollars among the top vendors. They received threecontracts in each odd year: 2003, 2005 and 2007. Among these nine contracts, only three of them

were 100% asphalt contracts, the remaining contracts were design-build, lump sum or somepercentage bridge work. These three asphalt contracts were all two-bidder.

It is odd that major vendors like Ajax Paving and Apac-Southeast who own facilities in thearea only bid on one contract. Hubbard Construction does not have any facility near-by, but bid onthree contracts. All American Concrete only bid on one contract T7032 in this study period.

Among two-bidder contracts (T7032, T7024, E7C32), the bidders prices came very closeto winner Cone & Graham. Table 6 demonstrates that the difference in percentage were all under5%.

CONT ID

#Bidder

Bidders Name BiddersAmount

ContractAwardedAmount

BiddersPricedifference fromCone &Graham

BiddersPricedifference in %

T703 2 All American $2,272,192. $2,269,459. $2,733.00 0.12%

17


18/30

2 Concrete 07 63T7024 2

HubbardConstruction

$21,749,832.60

$20,753,119.43

$996,712.00 4.80%

E7C83 2 Apac-Southeast

$7,554,977.46

$7,392,135.14

$162,842.00 2.20%

Table 6

Both Ajax Paving and Apac-Southeast have facilities in Pasco County. D.A.B.Constructors do not have facilities in Pasco County, but D.A.B. won more contract compared toAjax Paving and Apac-Southeast.

Map 5 below shows GIS location of contracts won by D.A.B., Ajax Paving and Apac-Southeast in Pasco County and surrounding areas. We did not see a vendor private boundarydivide on roads or highways among D.A.B., Ajax Paving and Apac-Southeast.

Map 5

18


19/30

SUBCONTRACT ANALYSIS

Cone & Graham did not have facilities in District Seven and they had to sub-let thecontract to vendor who owns facilities in the areas. The major subcontractors that they hired wereAjax Paving, Apac-Southeast, D.A.B. Constructors and R.E. Purcell. Table 5 provides detaileddata on subcontractor and subcontract dollar amounts on those contracts (not include 100% bridgework, only construction contract type) that Cone & Graham won. Contract T7059 was 17% andT7075 was 31% minor bridge work.

Con

tID

Let

Date

Contrac

tAwardAmount

Coun

ty

Cont

WorkType

%

BridgeWork

Sub

didasphalt

Sub

AmtTo whodidasphalt work

Aspha

ltSubAmt/ContAwardAmtIn %

Did

Subbuypropsl?(Y/N)

T7032

9/24/03

2,269,459

Pinellas

Re-construct

0 %Purcell,R.E.

311,698 14% N

T7024

12/3/03

20,753,119

PascoRe-construct

0%Apac-Southeast

3,754,692

20% Y

T705

9

4/27/0

5

18,726,8

94

Hillsbo

r

Re-

construct

17%minor

bridge

Ajax

Paving

3,535,8

5919% Y

E7C83

9/14/05

7,392,135

Pinellas

Re-surface

0%AjaxPaving

1,220,524

17% Y

T7075

11/2/05

33,375,017

Pinellas

Re-construct

31%minor

bridge

Apac-Florida

5,244,515

16% N

Table 5

19


20/30

Table 6 provides an overview of primary vendors qualification on all of contracts won byCone & Graham.

CONT

ID

#

Bidder

Con

tType

Ajax

qualify tobid? (Y/N)

Apac

qualify tobid? (Y/N)

Subcontrac

tor

Bidder

T7024 2 CC Y Y Apac Hubbard

T7032 2 CC Y Purcell All AmericanT7059 3 CC Y Y Ajax Hubbard, Lane

T7075 2 CC Y N Apac Hubbard

E7C83 2 CC Y Y Ajax ApacT7187 10 CC N N

T7025 3 CLS Y Ajax, Purcell

E7D10 3 CDB Johnson Broth, PCLCivil

E8I47 3 CDB Hewitt Cont, StateCont

Table 6

It is odd that Ajax Paving bought the plan, specification and proposal on constructioncontract E7C83, T7024, T7059, T7075, and did not submit the bid; even though they qualify forthe jobs. Ajax Paving later became as a subcontractor for Cone & Graham on E7C83 and T7059.Similar situation applied to Apac-Southeast. They qualified to construction contract E7C83,T7024, T7032, T7059, and did not submit the bid. Apac-Southeast was hired by Cone & Grahamas subcontractor on T7024 and T7075.

20


21/30

PRICE ANALYSIS

From previous sections we learn that top vendors Ajax Paving and Apac-Southeast wererunning a very close race. Especially in Hillsborough County Ajax Paving was awarded with$96,436,276 (9.2%) and Apac-Southeast received $90,695,369 (8.6%), a difference of 0.6%.

Price model reports show the top items being spent in this study period. Table 7 lists thetop four asphaltic concrete materials and total dollars spent. In this section we will focus on howAjax Paving and Apac-Southeast competing to each other on top rank asphaltic concrete material.

Rank Item Number Item Description Total $ Spent1 0334 1 13 Superpave Asphaltic Conc, Traffic C $ 54,222,84311 0337 7 6 Asphaltic Conc FC, Inc Bit/Rub, FC

12.5, FC-6$16,088,673

17 0334 1 23 Superpave Asphaltic Conc, Traffic C $12,906,05519 0337 7 5 Asphaltic Conc FC, Inc Bit/Rub, FC-5 $11,495,748

Table 7

All contracts involving superpave asphaltic concrete traffic C item (0334 1 13) withvendor Ajax Paving and Apac-Southeast were pulled from database to compare the unit price.Vendor unit price marked in green indicates won contract by that specific vendor unit price. It issuspicious that Ajax Paving was able to win contract E7D81 with an unusually high unit price$170, 42% higher than estimated.

CON Let Date Asphalt Ajax Apac Estimati Ajax % Apac %

21


22/30

T ID Quantity UnitPrice

UnitPrice

on UnitPrice

offEstimation

offEstimation

T7019

6/18/2003

5060.864.0 62.5 66.0 -3.03% -5.30%

E7C17 6/8/2005 21,160.7 75.0 70.0 64.0 17.19% 9.38%

T7091

8/31/2005

10,597.8103.2 76.0 94.0 9.79% -19.15%

T7135

4/26/2006

35,718.0115.0 95.0 96.0 19.79% -1.04%

E7D81

10/11/2006

7,362.5170.0 140.0 120.0 41.67% 16.67%

T7159

6/20/2007

23,085.993.0 100.0 114.0 -18.42% -12.28%

T7174

7/25/2007

7,860.5113.7 105.0 109.0 4.31% -3.67%

T7183

10/31/2007

11,396.4 81.3 106.0 130.0 -37.46% -18.46%

E7E48

11/14/2007

7,250.0122.0 103.2 135.0 -9.63% -23.56%

T7189

4/30/2008

19,315.6102.3 110.1 100.0 2.30% 10.10%

T7171

6/18/2008

96,387.397.0 91.7 95.0 2.11% -3.47%

T7198

7/30/2008

11,464.687.1 106.0 90.0 -3.22% 17.78%

T7201

12/3/2008

14,058.095.9 82.9 88.0 8.98% 5.8%

Table 8

Graph 6 shows the pattern of superpave asphaltic concrete item (0334 1 13) unit price ofvendor Ajax Paving, Apac-Southeast and estimation. Contract E7D81 is outside trajectory line.

22


23/30

Graph 6

Graph 7E7D81 is a three-bidder contract. One of the bidders, Lane Construction, did not bid on

two major asphalt concrete items. It raises concern because it made Ajax Paving and Apac-Southeast a two-bidder competitor in contract E7D81. Graph 7 above from Line Item Profile

23


24/30

model provides a closer look of all items in contract E7D81. It shows vendor Lane Constructiondid not bid on item 0327 70 11 (Mill Exist Asphalt Pavement) and item 0334 1 13 (Superpaveasphalt concrete).

In order to find out why there is such a big dip on item Mill Exist Asphalt Pavement

(0327 70 11) in Graph 7, we pull out another contract, T7159, in the same area and close to let datewith E7D81 using asphalt pavement material item 0327 70 11. Estimated unit price was too high(near four times) on E7D81 compared to T7159, see Table 9 below. It turns out the problem wasthat the estimated unit price too high, not that the vendors price too low.

CONTID

Let Date AjaxUnitPrice

ApacUnitPrice

EstimationUnit Price

E7D81 10/11/2006

6.90 7.11 15.00

T7159 6/20/2007

0.34 3.20 4.00

Table 9

As we ran line item profile model to get a detailed listing of proposal bidding item qualitiesand prices, we found unbalanced bid items on contract E7D81. Maintenance of traffic (itemnumber 102) that Ajax Paving submitted was 3.3 times less than Apac-Southeast and 24% lowerthan estimated. Meanwhile Superpave Asphaltic Concrete (item number 0334) was 42% higherthan estimated. But we did not see price continue gauging in Superpave Asphaltic Concrete aftercontract E7D81 let date (10/11/2006).

ADDENDUM

24


25/30

Large Single Bridge Contract

There were four large single bridge contracts, T7047, T7163, T7070, T7071, and they

occupied 28.7% of market share. We are curious if these four large bridge contracts wereremoved, what would be the outlook of market share?

Gilbert Southern and Kiewit Southern are one companies, we call them Gilbert & Kiewit inbrief. They won a mix of bridge and concrete contracts, similar to Cone & Graham. Theyreceived a total of six contracts and $182,485,079 awarded dollar amount. It was least contractnumber, but highest dollar amount compared to four chosen top vendors. What if we includeGilbert & Kiewit as one of top vendors, would it change the outlook of market share?

With the new hypothesis, the five top chosen vendors occupied 52.4% of market and therest of vendors had 47.6%. Graph 8 shows the major vendors and non-major vendors occupying

approximately half and half of pie chart.

Market Shares Total Dollars in District SevenContract Awarded Amount > $250,000

Year 2003 2008

Graph 8

The awarded contract dollar amount and percentage for the five top major vendors andnon-major vendors are presented in Table 10 by county of District Seven.

25


26/30

Counties

Ajax Paving$ Amt and % inCounty

Apac-Southeast$ Amt and % inCounty

D.A.B. Const$ Amt and %in County

Cone&Graham$ Amt and % inCounty

Gilbert &Kiewit$ Amt and % inCounty

Others$ Amt and % inCounty

Total$ Amt and % inCounty

CITRU

S

$14,208,611

19.15%

$37,100,000

50.0

1%

$22,878,29

1 30.84%

$74,186,90

6.22%

HERNA

$647,9671.44%

$28,633,236

63.80%$15,601,899 34.76%

$44,883,103.76%

HILLSB

$96,436,276 13.09%

$90,695,369 12.31%

$27,412,922 3.72%

$152,343,834 20.69%

$369,583,63950.18%

$736,472,00 61.75%

PASCO

$4,543,2883.89%

$4,574,3183.91%

$32,020,778

27.39%$20,753,119 17.75%

$55,032,556 47.07%

$116,924,09 9.80%

PINELL

$27,921,945 12.68%

$10,506,602 4.77%

$47,472,851 21.56%

$30,141,245 13.69%

$104,189,866 47.31%

$220,232,50 18.47%

Total

$128,901,5

09 10.81%

$106,424,2

56 8.92%

$74,862,6

25 6.28%

$132,738,8

92 11.13%

$182,485,0

79 15.30%

$567,286,2

51 47.56%

$1,192,698,

13 100.00%

Table 10

Gilbert Southern won an approximately 150 million dollars large bridge contract in year2003. Both Gilbert Southern and Kiewit Southern did not win too many contracts after year 2003.Graph 9 shows they did not compete too much with the rest of vendors after year 2004.

Graph 9

Gilbert & Kiewit mainly won contracts in Hillsborough and Pinellas Counties. By addingthem as a 5th top vendor, they shared some load from non-major vendors in Hillsborough andPinellas Counties, but did not influence other four top vendors competition. Graph 10 illustratesthe situation when comparing it to Graph 4.

26


27/30

Graph 10

27


28/30


D.A.B. constructors were stood out in Citrus, Hernando and Pasco Counties on the barchart in Graph 10. They were the best performer among the top major vendors. We decided toexamine closely to see how D.A.B. competed with all vendors in these three counties.

There were a total of nine contracts awarded to Citrus County. One large design-buildintrastate highway contract E7D10, $37,100,100, won by Cone and Graham. One bridge contractT7105, $3,222,000, won by Leware Construction. Of the remaining seven contracts, four of themwere won by D.A.B. and three won by C.W. Roberts. These seven contracts were all low biddernumber, 2 or 3, and the same bidders. Middlesex were one of three low bidder numbers, only bidbut did not win any contract in Citrus County. It raises the question: D.A.B., C.W. Roberts andMiddlesex, are they bidding partners?

There were a total of twelve contracts awarded to Hernando County and D.A.B. won halfof them. D.A.B. won two largest contracts which occupied half of awarded contracts dollars in

Hernando County with a lot of bidders. Ajax Paving did not win any contract here and Apac-Southeast won only one contract. We did not see any questionable indications.

There were a total of 27 contracts awarded to Pasco County and D.A.B. won nine of them.D.A.B. competed fiercely with Ajax Paving and Apac-Southeast, despite D.A.B. not havingfacility in Pasco County. We did not see any suspicious indication in the competition betweenD.A.B., Ajax Paving and Apac-Southeast.

28


29/30

SUMMARY

From the data we collected using Select model, a total of 1313 proposals, 731 bids, and 186contracts (not including small contracts less than $250,000) with $1,672,239,353 awarded dollarsin District Seven from year 2003 to 2008. This large amount of contract dollars were spread

among County Hillsborough 61%, Pinellas 23%, Pasco 7%, Citrus 4.4% and Hernando 2.7%respectively.

Through the proposal and bid analysis section, we found that Citrus County received thelowest contract numbers (9) and vendors participating in proposals and bids were also lowestamong District Seven. Hernando received the second lowest contract number (12), but was best invendor participation both in proposals and bids. Hillsborough and Pinellas County received thehighest contract numbers, 83 and 55 respectively, but did not score so well in vendor participation.

Market share analysis shows where awarded contract dollars resided and who receivedwhat amount as well as contract numbers. Four major top vendors were selected based on the

contract number they won and contract dollars they received. Our analysis shows these four topvendors, Ajax Paving, Apac-southeast, D.A.B. Constructors, and Cone & Graham occupied 40%of the market if base on contract numbers. Otherwise it was 27% if base on awarded contractdollars. Ajax Paving and Apac-Southeast were primary active vendors in Hillsborough, Pasco andPinellas Counties. D.A.B. Constructors had a big portion of the market in Citrus, Hernando andPasco Counties. Cone & Graham did not have market share in Hernando County. They wonhighest contract dollars compared to three other top vendors in District Seven.

We did not see bid rotation or mysterious price drop when a new vendor entered themarket. The dynamic market shares graph line shows that top vendor Ajax Paving and Apac-southeast competed with each other very closely and Cone & Graham competed less frequentlywith the other top vendors. These market shares analysis results again were stated in vendorcompetition analysis section.

The vendor competition matrix shows Ajax Paving and Apac-Southeast were biddingtogether more than 77%. If they teamed up together, their chances of winning a contract were56%. Cone & Graham bidding with the other three top vendors was less than 33%. If they teamedup with other three top vendors, their chances of winning a contract were less than 10%.

We learn that Cone & Graham did not have a facility in District Seven from VendorActivity Map section. They won nine contracts and total contract dollars were the highest amountamong top vendors. Only one contract was 100% bridge work, T7187, which had 10 bidders. Theremaining eight contracts were low bidders, four two-bidder and four three-bidder. ContractT7032, T7024, E7C83 were all two-bidder involving 100% asphalt work with bids very close towinner Cone & Graham. It is questionable thatbidder All American Concrete on contract T7032was only one time bidder in this study.

Both Ajax Paving and Apac-Southeast own facilities in Pasco County. D.A.B.Constructors does not have a facility in Pasco County. But D.A.B. won nine contracts, AjaxPaving and Apac-Southeast won two contracts each.

29


30/30

From subcontract analysis section we found that Cone & Graham hired top vendor AjaxPaving and Apac-Southeast as their subcontractors in four out of five construction contracts theywon. It is a concern that both Ajax Paving and Apac-Southeast were qualified to bid but did notbid and elected rather to be subcontractors.

We found un-balanced bid items on contract E7D81 won by Ajax Paving in price analysissection. The inexplicably high unit price on Superpave Asphalt Concrete and very low price onmaintenance of traffic brought our attention. But we did not see continued price gauging in thefollowing years after contract E7D81 let date (10/11/2006) on the most used concrete item. Wealso found the estimation was off too much on item Mill Exist Apshalt Pavement (1 avg depth).We did not find a complementary bid.

On the surface District Sevens market looks healthy. None of the top vendors was overlydominant or blocking others from entering the market. Overall, this study shows some suspiciousindications that might be possible sham bids among vendor Cone & Graham, Ajax Paving and

Apac-Southeast. Continued close monitoring of their activities is highly recommended.

D.A.B. Constructors were doing very well in Citrus, Hernando and Pasco Counties. Thereis a possibility that D.A.B. and C.W. Roberts might be bidding partners in Citrus County. Both ofthem won all of the contracts without other vendor competition, if we remove one design-buildcontract and one bridge contract and do not count Middlesex as a real competitor since they onlybid and did not win any contract. D.A.B. was doing well in Hernando and Pasco County and wedid not detect any suspicious problem.

district seve

Documents